Reportable Business Segments

9 Months Ended

Sep. 30, 2020

Reportable Business Segments

Reportable Business Segments

Note 13—Reportable Business Segments

The Company has two reportable business segments: (i) Interconnect Products and Assemblies and (ii) Cable Products and Solutions. The Company organizes its reportable business segments based upon similar economic characteristics and business groupings of products, services and customers. These reportable business segments are determined based upon how the Company reviews its businesses, assesses operating performance and makes investing and resource allocation decisions and do not include any aggregated operating segments. The Interconnect Products and Assemblies segment primarily designs, manufactures and markets a broad range of connector and connector systems, value-add products and other products, including antennas and sensors, used in a broad range of applications in a diverse set of end markets. The Cable Products and Solutions segment primarily designs, manufactures and markets cable, value-add products and components for use primarily in the broadband communications and information technology markets as well as certain applications in other markets. The accounting policies of the segments are the same as those for the Company as a whole and are described herein and in Note 1 of the notes to the consolidated financial statements in the Company’s 2019 Annual Report. The Company evaluates the performance of business units and allocates resources to them based on, among other things, profit or loss from operations before interest, headquarters’ expense

allocations, stock-based compensation expense, income taxes, amortization related to certain intangible assets and nonrecurring gains and losses.

The segment results for the three and nine months ended September 30, 2020 and 2019 are as follows:

	Interconnect Products				Cable Products
	and Assemblies				and Solutions				Corporate / Other (1)				Total Consolidated
Three Months Ended September 30:	2020		2019		2020		2019		2020		2019		2020		2019
Net sales:
External	$	2,221.9	$	2,000.8	$	101.5	$	99.8	$	—	$	—	$	2,323.4	$	2,100.6
Intersegment		18.4		11.9		9.6		11.7		—		—		28.0		23.6
Segment operating income		498.4		433.9		10.9		10.2						509.3		444.1
Nine Months Ended September 30:
Net sales:
External	$	5,899.4	$	5,789.0	$	273.5	$	285.4	$	—	$	—	$	6,172.9	$	6,074.4
Intersegment		39.4		22.9		27.3		40.8		—		—		66.7		63.7
Segment operating income		1,217.6		1,272.4		25.7		29.3						1,243.3		1,301.7

(1) Corporate / Other is not a reportable business segment; the reconciliation of segment operating income to consolidated results is included in the table below.

A reconciliation of segment operating income to consolidated income before income taxes for the three and nine months ended September 30, 2020 and 2019 is summarized as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Segment operating income	$	509.3	$	444.1	$	1,243.3	$	1,301.7
Stock-based compensation expense		(19.0)		(16.6)		(51.0)		(46.4)
Acquisition-related expenses		—		—		—		(25.4)
Other operating expenses		(14.5)		(13.9)		(42.2)		(40.5)
Interest expense		(28.0)		(29.7)		(87.1)		(89.5)
Loss on early extinguishment of debt		—		(14.3)		—		(14.3)
Other income, net		1.0		4.5		3.4		7.6
Income before income taxes	$	448.8	$	374.1	$	1,066.4	$	1,093.2